Sunil Dhingra - Renewable Energy and the Minigrid, The Indian Experience

7/31/2019 Sunil Dhingra - Renewable Energy and the Minigrid, The Indian Experience

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Session 3: Energy Services:

Rural Electricity

Barriers to and Incentives for PromotingRenewables

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India: Renewable Energy and the Minigrid,

The Indian Experience

Sunil Dhingra, Senior Fellow,

TERI, New Delhi


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About 42,000 villages (7%) in the country still remain unelectrified.

Nearly 33% of rural households mainly in rural India are withoutelectricity access (Census 2011)

Rural areas face major challenges of low per capita consumption and

inadequate power supply

In the last decade, electricity generation increased by 60%

But increase in access to households increased by only 23%

Average annual per capita consumption of electricity is 632 kWh

compared to China (900 kWh), Thailand (1,500 kWh) and Malaysia (2500

KWh)

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Rural Electricity Access


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Rural Electrification Initiatives of GoI

The Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY),

launched in April 2005 aims at: Grid Extension(2005)

Electrifying all villages and habitations

Providing access to electricity to all rural households

Providing free-of-charge connections to Below Poverty Line (BPL) families

Off-grid through renewable sources in rural areas Decentralized Distributed Generation (DDG) Program under RGGVY MoP:

Capital & operating incentives to off-grid distribution generation projects

in villages without grid connections

Remote Village Electrification Programme by implementing renewable

energy projects in offgrid decentralized mode at the locations where

extending grid electricity have been deemed unsuitable (economically or

technically).

Village Energy Security Programme through biomass based system

State specific DRE initiatives (Chhattisgarh, WB, Orissa) To cover remote

villages

Other initiatives (TERI, SELCO, DESI Power, Husk Power etc..)


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Provisions under different Programs

Components RVEP VESP DDG

Eligibility

condition

Village population

100 households

Physical

target/Launch

Year

10,000 remote

villages (2002-03)

200 remote and

inaccessible villages

(2005)

No clear target

(2009)

Achievement 9,009 remote

villages

700 kW capacity, 79

projects sanctioned

283 projects sanctioned

Ministry MNRE MNRE MoP

Technology

preference

95 % projects SPV Biomass and

bioenergy

No preference

Energy

applications

Lighting Cooking, lighting &

motive power

Lighting and productive use


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Contd. Provisions under different Programs

Components RVEP VESP DDGImplementing

agency

SNA Govt. dept., NGOs SNA, identified CPSUs, SEBs

Financial

arrangement

Min(90 % of capital

cost, benchmark

cost) and balance

by State Govt

Grant up to 90 % of

the project cost

And balance by

State Govt

90 % of the project cost as

subsidy and balance 10% as

loan or Grant from State

Govt

Management Community Community/NGOs Private

developers/Community

O & M 5 year grant for

annual

maintenance

contract with

supplier

Min(2 years O&M,

10 % of project

cost)

Viability gap between O&M

and revenue generated

funded for 5 years (upto 8%

project costs)


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Glimpses of off-grid Rural Electrification projects in India


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Main Barriers

Policy and

Regulatory

Competition fromconventional grid

Tariff Subsidy under GridExtension Program

Higher tariff charged to off

grid users compared to gridelectricity tariff

No clarity on status ofstand alone plants oneventual arrival of grid

Inadequate support underviability gap fundingmechanism

Poor response from statesand project developers.

Lack of programs toimprove economicbenefits and productivityfrom modern energyaccess

Technology and

Financial

Lack of capacity, training,technical assistance, andcapacity buildingframework

Inadequate capacitybuilding of local operators

Enabling infrastructureweak in the state

Institutional

Weakest link in many ofprojects with less uptimedue to absence of projectownership

Poor Maintenance andservicing of equipment

Long term fuel supplyarrangements in case ofbiomass

Monthly tariff realizationchallenge on continuousbasis

Absence of role clarity

between differentstakeholders

Capacity and Skill

High cost of generationdue to load factor issues(low PLF)

More finance, from manysources and in manyforms needed: with

solutions matched toparticular challenges, risksand returns

In general, off-gridconnections less attractiveto the private sector aslow financial returns

Grid integrationconstraints

Lack of technologicalexpertise at local level

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Key Learning in providing access to off-grid

areas:

Community owned and managed to Entrepreneur/Franchisee basedmodel

Incubate enterprise models through the application of soundtechnological, environmental and market practices

Institutional Model

Move from Upfront capital grant based to Performance linked

Innovate business solutions that can create livelihoods, meet basicneeds and realize environmental benefits on a large scale

Financing

Need to improve the technology standard both energy andenvironmental performance of existing technologies

Institute support service mechanisms to ensure viability and long-term sustainability

Technology and Service


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Two stage biomasgasifier for electricity

generation

Study the energy poverty,inequality across income

class groups and betweenregions

Biomass and Solar basedpoly generation system(electricity + cooling)

Setting up Solar chargingstations, entrepreneur basedbusiness model, total 800 kW

biomass gasifiers system

TERI Initiatives

Rural Electricity Access

Rural energytransitions

TechnologyDevelopment Dissemination

LABL, biomassbased electricitysystems

Knowledge exchange, technology transfer and marketdevelopment


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Innovating at LaBL

Continuous improvements in solar

lantern designs with reputed

technology partners, driving down

cost, improving efficiency & quality

Charging stations expandable tosolar energy hubs, providing

services like water purification,

mobile & battery charging

Technical Resource Centres, anafter-sales service network for

responsive repair services through

local community representatives

Innovations in LaBL


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370 000lives

impacted

1486 villages

covered

> 1500green jobs

created

75 000 solar

lanterns

21 States

5 countries

> 60NGOs

involved

Journey so farJourney so far.


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In Sum: Energization based on renewable sources of remote areas is not an easy process: it

requires sophisticated approaches and long-term planning

Projects must adapt to local conditions; across different income groups in differentregions, the mobilization of local communities is essential.

Promotional aspects of Renewable Energy based Rural Electrification policies

Need for additional policy and regulatory mechanisms to delink the project financialviability from the high consumer tariffs being levied on the offgrid consumers.

Compliance related aspects of Rural Electrification projects so that a greater diversity ofmodels, many of which have been demonstrated by different agencies are able to findspace, benefit from and influence policy through good practices.

To address specific Stress Points in policy, such as:

Problems faced by project developers amongst which, for example, dialogue betweenDRES plant owners and state DISCOMS is an urgent need

DRES grid interconnection to the local LT Network

innovative business models that could be supported under a more conducive policyenvironment

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Thanks for your kind attention

Contact: [email protected]

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Sunil Dhingra - Renewable Energy and the Minigrid, The Indian Experience

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